Reference no: EM132484422
Fiesta foundry is considering a new furnace that will allow them to be more productive. Three alternative furnaces are under consideration.
Furnace A Furnace B Furnace C
Initial Investment $450,000 $400,000 $300,000
Annual Revenues $80,000 $70,000 $70,000
Annual Cost $10,000 $8,000 $13,000
Salvage value $50,000 $40,000 $35,000
Life of asset 15 years 15 years 15 years
Question 1: Calculate IRR to determine best design using a spreadsheet.